CORRECTED - U.S. on sidelines of Iraq oil law debate-envoy

(corrects surname in pargraph 2 and 3)

LONDON, Feb 5 (Reuters) - The United States is watching from the sidelines as negotiations stall between the federal Iraqi government and the regional leadership in Kurdistan over two laws to govern oil production and revenue sharing.

"This is essentially and at its core a negotiation between Iraqis about Iraq's own future," Ambassador Charles Ries told Reuters on Tuesday.

Ries is responsible for co-ordination of U.S. assistance and economic policy to Baghdad. He retains the title of ambassador from his previous post in Greece.

Political wrangling has stifled progress on the draft law for dividing revenues from Iraq's considerable oil reserves, prompting the largely autonomous region of Kurdistan to begin signing its own contracts in September.

Iraq's oil minister has recently cancelled supply contracts agreed between the Kurdistan regional government and international oil companies, including Austria's OMV (OMVV.VI: Quote, Profile, Research, Stock Buzz) and South Korea's SK Energy (096770.KS: Quote, Profile, Research, Stock Buzz).

Ries stressed the importance of an agreement being reached on the oil law as quickly as possible.

"It's hard to see how Iraq can grow, develop and achieve stability without substantial resources of its own, and investment in oil and gas leading to increased exports is the main driver for that Iraqi-led recovery," he said on the sidelines of an energy conference in London. (Reporting by Alastair Sharp; editing by James Jukwey)